Q&A with Potato Corner’s President Jose Magsaysay Jr on Growth & Expansion

Q1: Fast food giants like McDonald’s and Jollibee have french fries as part of their popular value meal, what made you and your partners decide to launch a solo product, french fries, via your Potato Corner kiosks?

In 1992, we did not know any better. We just thought it was a good idea because flavored popcorn was doing well and putting flavor in French fries looked good. We didn’t know it was going to be success. We just needed extra income as we were just starting our families back then.

Q2: What were the early indicators that your new venture was going to succeed?

One month payback on our initial investment. We had many inquiries to franchise it.

Q3: When you are successful, you are bound to attract competition, but Potato Corner is the dominant brand, how have you defended yourself against new entrants and why did they not succeed?

Having a no problem attitude. We franchised the business during the infancy of the business

  • get economies of scale;
  • get market dominance in this category (first mover advance is only good on this kind of business if you get the numbers before any competitor does.)

We made it very simple all these 22 years – brand and brand focus.

We kept DNA integrity.

Strong branding to us is a strong product attached to the brand name, which to us is flavored fries.

Q4: You are now an international brand, I have in fact seen some of your kiosks abroad, how did you start expanding internationally? Was it a deliberate plan?

It was not deliberate, none of what we did was deliberate for the first 8 years. Things became deliberate when we professionalized our board and I graduated from a Masters Degree in Entrepreneurship.

A phenomena has been happening, that’s the way we see it. In the last 6 years, our former customers who were teens or younger then during the 90’s are now our business partners. Business partners either by virtue of being our franchise but also as partners in ownership of some stores and in our new brands/ companies.

Even foreigners who studied in the Philippines were the ones who initially started our international stores. For example,

  • a UST accounting student who is an Indonesian is our Indonesian partner where we now have 40 stores,
  • an international school student in Makati is now our partner in the USA where we now have 22 stores,
  • a Poveda graduate who is Indian is now a Panama partner.

All of them experienced our flavored French fries, loved it and asked us to make them a business partner in the countries they are in now. They are now in their 30’s.

As for our new business partners and franchises in the Philippines, they are in their 20’s.

Q5: Your company also ventured into other areas like fastfood and hotel management but they were not as high profile as Potato Corner, tell us what was the business logic behind your business expansion and where the future revenue and profit will come from?

A large portion of our revenues will continue to come from our food business, we want to make sure we concentrate in our core, Potato Corner. To us this is the goose that lays the golden egg and we will make sure we will take care of this and put our best team to run this brand and not dilute their focus by letting them co-run other businesses or other brands. We owe it to our franchisees and Potato Corner business partners to take care of Potato Corner.

To my mind, at least for someone like me or maybe like us, who do not have the resources of blue chip companies, we stumbled into a business that became successful, to me it’s really luck, and luck to me is – trying, partnering with the right partners, hard work, mastering the business model, learning from mistakes, being sound and honorable in business, having a positive outlook, having a no problem attitude (I call this being in the gray area as opposed to being either black or white, we have an advantage doing business in the Philippines), trust everyone but expect to be disappointed once in while, now since this is luck to me and luck is hard to come by (like lotto or putting up a new successful business), we better take care of this business first.

Q6: I understand there were a few management challenges and struggles in the early years of Potato Corner, can you tell us about it and how you overcame them?

When I shook Titoy Pardo’s hand to say goodbye to Wendy’s where I worked for him almost 10 years he said something that time that I did not find important until 2 years into our Potato Corner business. He said to be careful as it is challenging to be with partners. About 2 years in our success, we started experiencing some friction in managing the company. That time my partners and I were actively running the business. To fix this issue, we hired a professional Chairman and CEO to help run the business and teach us how friends and business partners should work together.

We realized then that in a partnership there has to be only one head running the company with the other partners trust and confidence. A company with two or more heads, like an animal, is a monster. I am currently the company’s CEO, I am paid to run the company as an full time employee and I report to the members of the board.

We also realized early on that owners need to have a sounding board and a very objective perspective, we now have 3 independent directors in the board. Entrepreneurs are risk takers and our professional board tempers these. Our company remains entrepreneurial in culture and action but having the care taken from a discipline of a Master in business.

When we started, we had no money to expand and build brand equity, what we did to grow quick was we used other peoples money and time, we franchised.

Q7: You were still with Wendy’s when Potato Corner was launched and at one point, your Potato Corner stint was interrupted when you joined Mr. Donut, what have you learned from these companies that helped you build and grow Potato Corner?

I owe plenty to my bosses at Mr. Donut. They paid for my Masters degree tuition. I learned what corporate was all about and appreciated how knowing finance was crucial in running a business.

I have great mentors, they may not have taught me personally but I watched and learned how they did business when I was working for them. Titoy and Marilyn Pardo, Manolo Agustinez, Jess Montemayor, my gurus in AIM – Ed Morato, Andy Ferreria and Danny Antonio.

Q8: Your uncle was the President of the Philippines, and like him, I understand you also have humble beginnings. You also have a cousin who became a senator. Is it a family thing that led you to enter politics at one time? Please share with us your lessons during your days as a politician.

I tried politics because of them and many other relatives who became politicians, my brother too. Before I decided to run I called my brother and Jun Magsaysay to ask their opinion and both said try it and see if you like it. I tried, I lost and now know that politics is not my cup of tea. So I leave politics to my relatives.

Leave a Reply

Next Post

Q&A with AHEAD Learning Systems Founder Rossana Llenado on Market-Driving Strategy

Mon Jun 2 , 2014
Q1: When you founded Ahead Tutorial, what made you decide to focus on students doing well than students having flunking grades? At the time I started AHEAD, there was a negative perception attached to tutorials, which were mostly done at the students’ or tutors’ homes. Most people saw tutoring as a last resort for students who were failing or in […]

Josiah Go features the movers and shakers of the business world and writes about marketing, strategy, innovation, execution and entrepreneurship


Send this to a friend